Archives on April, 2015

Zeek Rewards: Receiver Issues First Quarter Status Report for 2015

Posted by ASDUpdates on April 30, 2015One Comment

RECEIVER’S STATUS REPORT FOR THE FIRST QUARTER OF 2015

Here are a few of the high points, you can see the full Report here:

The Receiver currently maintains six bank accounts on behalf of the Receivership Estate for holding Receivership Assets: the “Affiliate Account,” the “Seized Asset Account,” the “Pre-Filing Account,” the “Settlement Account,” the “Withholding Account,” and the “Holdback Account.”

Excluding earned interest and transfers between accounts, the Receiver made the following deposits into these accounts during the first quarter of 2015:

  •  $1,577,043.06 into the Settlement Account from settlements with non-affiliate third parties;
  •  $520,250.00 into the Affiliate Account from payments from various financial institutions relating to previously dishonored cashier’s checks, teller’s checks, official checks, and bank money orders.

As of March 31, 2015, the Receivership Estate held approximately $91.3 million in the Affiliate Account, approximately $89.3 million in the Seized Asset Account, approximately $293,000 in the Pre-Filing Account, approximately $6.3 million in the Settlement Account, $0 in the Withholding Account, and approximately $1.1 million in the Holdback Account.


The Receiver Team is awaiting a ruling on its Motion for an Order Directing NxSystems to Turn Over Receivership Assets and/or Find them in Contempt of the Court’s Order Freezing Receivership Assets regarding the approximately $9 million outstanding.


During the first quarter, the Receiver Team continued litigation against Preferred Merchants and Jaymes Meyer to recover the approximately $4.8 million they improperly transferred and failed to return in violation of the Freeze Order.

One property in the Turks & Caicos Islands has been frozen, and the Court has issued an order directing that it be transferred to the Receiver. The estimated value of this property is believed to be over $2 million. In addition, Mr. Meyer agreed to a lis pendens upon California real property that he purchased with Receivership Assets for over $400,000.


With respect to Solid Trust Pay, the Receiver Team has issued a demand to Solid Trust Pay for approximately $1.6 million in outstanding Receivership Assets and is awaiting additional information from Solid Trust Pay to evaluate its response to the Receiver’s Demand.


Litigation in the SEC Enforcement Action 

The Receiver Team litigated the following matters in the SEC Action:

  • The Receiver Team filed a response brief in the Fourth Circuit Court of Appeals regarding the Belsome movants’ appeal of the striking of attorney charging liens.
  • The Receiver Team continued litigation seeking the return of Receivership Assets from NxSystems.
  • The Receiver’s conflicts counsel filed a Motion for Order to Show Cause or Turn Over Receivership Assets Against Compass Bank.
  • The Receiver team continued litigation to recover Receivership Assets from James Meyer and Preferred Merchants Solutions, LLC.

(emphasis added)

To date, almost 121,000 Affiliate claimants have accepted their claim determinations and have been or will be issued a distribution in the near term. The next distribution date for claimants who have not already received a distribution is April 30, 2015. . However, in excess of 50,000 Affiliate claimants have failed to respond to their claim determinations. Each claimant is required to act further if they would like to receive a distribution from the Receivership Estate. Failure to act further may eventually cause a claimant to forfeit the distribution. 

The Receiver contacted each of the Affiliate claimants who failed to respond to their claim determination to request that such claimants respond to the claim determination by April 15, 2015 and notified them that, pursuant to authority granted by court order, they would be deemed to have accepted their claim determination if they failed to respond by that date.

Approximately 1,800 Affiliates have objected to the claim determination issued by the Receiver Team. The Receiver Team is continuing to address these objections in an effort to resolve such objections before intervention by the Special Master or the Court would be needed. The Receiver Team has been successful in resolving the majority of these objections to date.


Along with the Status Report are 2 Exhibits detailing financial information.  Exhibit A and Exhibit B

BehindMLM – uFun Club

Posted by ASDUpdates on April 20, 2015No Comments

These come from BehindMLM.com 


uFun Club ringleader wanted for pyramid scheme fraud

These days it’s getting more and more difficult to relaunch scams once your name is out there.ufunclub-logo

What with the speed with which news travels these days and just the sheer volume of information available to anyone with an internet connection, serial scamsters have to go to increasingly sophisticated lengths to launch their schemes.

Take for example uFun Club, which now increasingly starting to look like a Ponzi scheme heavily influenced by serial Chinese scammers. [Continue reading…]


uFun Club investigation to be handled by Thai police

Much nonsense has come out of the uFun Club camp these past few days, with claims on social media alluding to the dropping of the investigation currently taking place.ufunclub-logo

The claims, largely made on social media, primarily attempt to plant the seed that the Department of Special Investigation (DSI) are going to drop the uFun Club investigation any day now.

The good news for uFun Club investors still in denial?

The DSI did indeed decide to drop their own investigation into uFun Club.

The bad news?

DSI dropped the investigation in favor of letting the police continue to take the lead. [Continue reading…]


TelexFree: April 2015 Interim Status Report and Change in Conference Schedule

Posted by ASDUpdates on April 19, 2015No Comments

telexfree-logo

Interim Status Report

Since the last status date, the government has produced approximately 45 GB of additional information received as a result of a search warrant executed at an internet service provider. This information consists largely of TelexFree-related YouTube videos and back-up and subscriber data. The government has also produced the contents of a personal email account belonging to defendant James Merrill.
The government recently met with Brazilian prosecutors and law enforcement agents, who are conducting a separate investigation of TelexFree and certain individuals. The Brazilian authorities have produced a large amount of data and will be producing additional materials in the coming weeks. This additional data, mostly derived from multiple search warrants executed in Brazil, will likely amount to 100s of gigabytes. Once the government has received all of the materials from the Brazilian authorities it will copy the materials for the defendant.

Overall, at this stage the following discovery remains to be produced:

• Data contained in two Hotmail email accounts and one Apple email account, also received in response to a search warrant. Production of this material has been delayed by errors in the data as produced by the email providers.
• Data (5-10 TB) received from a cloud-based service that stored data for TelexFree.
• Materials received in mid-March 2015 from the Brazilian authorities. Among other things, this includes a forensic report by Ernst & Young, which was commissioned some time ago by the Brazilian government to opine on whether TelexFree’s operations amounted to a pyramid scheme. (The report is in Portuguese – the government will produce the original and a translation that is currently in process). As noted above, the government expects a substantial additional production from Brazil in mid-April 2015.
• Various recordings made by undercover HSI agents at TelexFree conference and in conversations with a TelexFree promoter.
In light of the above, and in keeping with the Court’s designation of this matter as a “complex case” under 18 U.S.C. s 3161(h)(7)(B)(ii), the government suggests an interim status conference in approximately 60 days. Beyond waiting to receive additional productions from Brazil, the substantial additional data sets, e.g., from the cloud-based provider and the Brazilian government, will take time to process and copy.


Motion to Adjourn Scheduled Status Conference and Exclude the Time Under the Speedy Trial Act

The Court has scheduled a status conference for April 13, 2015. Because discovery is proceeding steadily in this unusually large case, and the parties have been communicating as needed about the production, the parties request that the conference be adjourned to June 12, 2015, or some similar date that is convenient for the Court. Both parties also request that the Court exclude the time from April 13, 2015, through June 12, 2015, from the speedy trial clock, pursuant to Local Rule 112.2(b), the Speedy Trial Act, 18 U.S.C. §§ 3161(h)(7)(A) & 3161(h)(7)(B)(iv), and §§ 5(b)(7)(A), 5(b)(7)(B) & 5(b)(7)(C)(iv) of the Plan for Prompt Disposition of Criminal Cases for the United States District Court for the District of Massachusetts (effective December 2008), on the ground that the ends of justice are served by granting the adjournment and excluding this period, and outweigh the best interests of the public and the defendant in a speedy trial.

An Order was subsequently issued allowing the “exclusion of time pursuant to the below-referenced provision of the Speedy Trial Act from Monday, April 13, 2015 (the date on which the fourth Interim Status Conference was scheduled to occur), through and including Friday, June 12, 2015 (the date of
the fifth Interim Status Conference).”

I have uploaded these documents onto the Files website.

Zeek Rewards: Turks and Caicos Island Vacation Home Transfers to Receivership

Posted by ASDUpdates on April 2, 2015No Comments

On March 11, 2015, Mr. Bell filed this motion:

Kenneth D. Bell, the Court-appointed Receiver (“Receiver”) of Rex Venture Group, LLC d/b/a ZeekRewards.com (“RVG”), respectfully submits this Motion to Transfer Property to the Receivership Estate. The Receiver respectfully requests that the Court impose and enforce an equitable lien on a water-view vacation home in the Turks & Caicos Islands and related assets
(collectively, “Turks & Caicos Property”) that were purchased with RVG assets that Preferred
Merchants Solutions LLC (“Preferred Merchants”) and Jaymes Meyer improperly took from an
RVG trust account and order that the title and ownership be transferred to the Receivership
Estate for the benefit of the victims of the ZeekRewards Ponzi / pyramid scheme.

Today, Senior Judge Mullen issued this order:

ORDER
IT IS, THEREFORE, ORDERED, ADJUDGED, AND DECREED that:
1. The Motion to Transfer Property to the Receivership Estate is hereby GRANTED; and
2. Bella Vita Ltd., and any other party with ownership or other rights to the Turks & Caicos property described below, is hereby ORDERED to transfer to the Receivership Estate title and ownership of the Turks & Caicos Islands real property designated as Title #60609/24 / Norway & Five Cays Section / Providenciales Island along with all improvements, attachments and personal property within and related to the property (including but not limited to furniture, fixtures, a boat and scuba equipment).

It seems that those who purvey these Pyramid/Ponzi schemes like to have ill-gotten homes near some body of water, as ASD’s Andy Bowdoin had a lake house complete with the ubiquitous water toys allegedly for the members of the ASD scam to use if they were ever in the area. And just like the Jaymes Meyer, the home and all water toys were absorbed into the restitution accounts.

While this is not the actual property, it gives you an idea of what is involved:

60609 – Norway and Five Cays: Chalk Sound, Providenciales

Single Family Home
MLS # 1400565